Correlation Between Fossil and Air Products
Can any of the company-specific risk be diversified away by investing in both Fossil and Air Products at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Fossil and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fossil Group and Air Products and, you can compare the effects of market volatilities on Fossil and Air Products and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Fossil with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fossil and Air Products.
Diversification Opportunities for Fossil and Air Products
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fossil and Air is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Fossil Group and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products and Fossil is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Fossil Group are associated (or correlated) with Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products has no effect on the direction of Fossil i.e., Fossil and Air Products go up and down completely randomly.
Pair Corralation between Fossil and Air Products
Given the investment horizon of 90 days Fossil Group is expected to under-perform the Air Products. In addition to that, Fossil is 3.24 times more volatile than Air Products and. It trades about -0.06 of its total potential returns per unit of risk. Air Products and is currently generating about -0.12 per unit of volatility. If you would invest 32,662 in Air Products and on November 28, 2024 and sell it today you would lose (1,277) from holding Air Products and or give up 3.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fossil Group vs. Air Products and
Performance |
| Timeline |
| Fossil Group |
| Air Products |
Fossil and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fossil and Air Products
The main advantage of trading using opposite Fossil and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fossil position performs unexpectedly, Air Products can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Air Products will offset losses from the drop in Air Products' long position.| Fossil vs. Lanvin Group Holdings | Fossil vs. Signet Jewelers | Fossil vs. Tapestry | Fossil vs. Capri Holdings |
| Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.
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